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Date: Dec/17/2017
By: John Franc
Category: Buyer
Type: Article
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A couple of things should you look for when buying a Lagoon Home in Ocean County New Jersey

Date: Dec/17/2017
By: John Franc
Category: Real Estate
Type: Article

Super storm Sandy created havoc when it hit New Jersey in 2012 and continues to affect the housing market here in Ocean County.  

You have decided that you would like to buy a lagoon home for you and your family to enjoy all that the Jersey shore has to offer.  Fishing, crabbing, boating, kayacking and paddle boarding are a few things that lagoon living offers.  Searching online for your dream lagoon home is one of the first steps for you.  You should target an area that you like and search for homes that meet your budget.  Your budget may and will be affected by the cost of flood insurance.   Rates are affected by the "BASE FLOOD ELEVATION" (BFE) of the house you are searching for.  

There are different BFE requirements in all the local municpalities.  Depending on locaton and street it can vary from 8 to 12 feet.  Many homes sustained damage in Super Storm Sandy and may have received a "Letter of Substantial Damage" from the township.  This may require that the house be either torn down or raised. This will also affect you if you are getting a mortgage, the cost of flood insurance may have an impact on the amount of money a lender may give you. 

This is importat information that you should know before buying a lagoon home.  Your agent should know or be able to provide this critical information to you.  There is also a surcharge on flood insurance that you will pay, $50.00 yearly if it is a primary home and $250.00 yearly if secondary.  

The other important item to be aware of when buying a lagoon home is the condition of the bulkhead.  If the bulkhead needs replacement it can cost anywhere from $250 to $350 a linear foot.  A 75 bulkhead can cost you upwards of $25,000 to replace. 

Using a qualified inspector that specializes in bulkheads is well worth the investment and protection.  The vinyl bulkheads being used now can last up to 50 years. So definately have the condition checked and what the life span is on the home's bulkhead.  Your agent should consider that your offer price reflects the cost of repairing or replacing the bulkhead.

Steps to buying a home you can afford

Date: Dec/17/2017
By: John Franc
Category: Buyer
Type: Article
1. Check your credit score and look at your cash flow.

Start by checking your credit score. The higher your score, the better the interest rate on your mortgage will be. Good credit can mean significantly lower monthly payments, so if your score is not great, consider delaying this big purchase until you've built up your credit rating. As for monthly payments, personal finance experts say a good rule of thumb is to make sure make sure the total monthly payment does not consume more than 30% of your take-home pay.

2. Have cash for a down payment.

Technically, you don't always have to put any money down when financing a home today, but if you can't afford to put at least 10% down, you may want to reconsider buying. Ideally, you should be able to put 20% down — anything lower and you will have to pay for private mortgage insurance (PMI), which is a safety net for the bank in case you fail to make your payments. PMI can cost between 0.3% and 1.50% of mortgage, depending on the size of your down payment and your credit score.

3. Plan for the surprise expenses.

Even if you can afford the monthly payment, be aware of hidden costs. Buying a home means property taxes, insurance,possible Home Association fees that can add hundreds of dollars per month. You need to consider other costs such as renovations, closing costs, inflation to help you decide if you can comfortably maintain the monthly mortgage. You want a mortgage that will not cause any stress.

4. Get pre-approved for a mortgage.

Once you figured out your finances and have decided investing in a home, determine how much you can afford to spend and stick to that limit. I recommend getting a pre-qualification letter from a mortgage lender before house hunting. The reasons real estate agents ask for a pre-qualification letter is for your benefit and for the real estate agents safety. A pre-qualification letter benefits you by showing, your realtor and more importantly to sellers how much you can afford and that your serious about purchasing a home. Currently not many sellers will even consider request for info or offers with a buyer who has not shown a pre-approval letter. A pre-qualification letter and other identification benefits a real estate agent in 2 ways. (1) A agent spends time and money helping a buyer find and purchase their dream home and just wants some proof the buyer is serious about buying a home. (2)The more important reason for asking for pre approval and identification is for their own safety. Crimes against agents (Robbery, Murder, Rape) have been on the rise since 2010. Most of these crimes take place while showing a home to a buyer. I am not being over dramatic. See: The-concerning-rise-of-real-estate-agent-attacks and attacks-against-real-estate-professionals-surg. When considering multiple offers, sellers will likely only consider an offer to those with a pre-qualification letter before those without one. To apply for pre-qualification, you'll have to find a lender — either the bank or a mortgage broker. Compare offerings from the bank and a few mortgage brokers before settling on the right lender for you. Remember, You don't have to spend every cent for which you're approved. It's generally good practice to aim for a home that costs less than the maximum amount for which you qualify.

5. Find the right real estate agent for you.

You should consider using an agent that is an ABR (Accredited Buyers Agent). This agent has taken more courses and has more expertise when working with buyers. The Accredited Buyer’s Representative (ABR) designation is the benchmark of excellence in buyer representation. This coveted designation demonstrates to peers and consumers your commitment to providing outstanding service for real estate buyers.  

6. Start hunting for places within your price range.

Discuss with your agent the price range that you want to spend. Your agent will then be able to start searching homes he feels will match your criteria and be able to set up an auto-email from the MLS that will send you homes as soon as they are posted. This will provide with new inventory to consider.

7. Make appointments to look at properties.

Don't rely on photos only. They wont show you the entire condition of the home or get a feel of dimensions of the rooms from a photo. Without question you need to go Schedule a showing to physically see the house in person early in the "searching for homes" process. Make detailed notes on everything right and wrong with the home. Look for anything that can cost you money in the very near future and make a detailed note of that (You can use these observations to negotiate a lower price with the seller).

8. Put in an offer you're comfortable with.

After your real estate agent sent you the CMA(Comparative Market Analysis) report you now have a accurate market value of the home your making a offer on. You went and seen the home in person and carefully made note's of everything you found wrong with the home that would cost you money to repair. For example the roof might need to be re shingled or local regulations are requiring certain upgrades to the property. You decided, if you can get the seller's price down below the asking price you would still buy the home. You made sure the home meets your basic needs and special requirements before putting in an offer. Buying a home is a very emotional process, It's vital to remain rational and stand by the price limit you decided you would pay for the property. Don't get caught up in bidding wars, and bid way over the price you originally decided you would pay for the home because you love the house so much. Don't put in an offer because you're emotionally drained and desperate to finish the process. Expect to miss out on a few homes before you find the one, It is possible to find your dream home within weeks, But it could take up to four months or more. Prepare yourself for a lengthy process and possibility of some let down's. Sometimes a seller wont budge at all and sticks with his price or you get out bided. When you find the right home make quickly make a bid on it. There may not be much room to negotiate or drive the price down, as you'll likely be facing competing offers. This is very important to understand, What other buyers are competing on is who is most qualified to buy the property. It's not always the highest price offer that gets accepted. Sellers are really looking for certainty of close, so if you can provide the most certainty of close to that seller, they're more likely to accept your offer.

9. Close.

The exciting day of your closing has finally arrived. The final walk-through will allow you to examine the house to ensure you that the house is in the same condition as when you placed your offer. You will also see that all the contract terms of items (such as appliances) that are being sold with the house are still present. Then off to the closing table where the key people will be there to help. Your agent, mortgage lender and attorney will be in attendance. They will be available to negotiate in the case that the final walk-through revealed any issues. Otherwise if there are no issues the closing will take place and after signing the appropriate documents the keys to your new home will be handed over to you! If the seller accepts your offer, you will enter contract before closing, and the deal will be contingent upon you securing a loan with your lender, getting the home inspected, and doing a walk-through inspection 24 hours before closing. Be prepared for closing costs such as appraisal fees, attorney fees, title insurance, property transfer taxes, and inspection fees, which can add up to be approx. 5% of the mortgage amount. Closing customs will vary depending on the state you're buying in, which your real estate agent or lawyer will be able to explain to you.

 

CLOSING COSTS

Date: Dec/17/2017
By: John Franc
Category: Real Estate
Type: Article

Fees that are associated with buying a property, borrowing money, and preparing the paperwork to finalize the purchase are your “Closing Costs” The amount of your “Closing Costs” can vary depending on the purchase price of your property, location of your property, type of property that you’re purchasing and the complexity involved.

Work closely with your Buyer’s Representative in the beginning of your home search so you can estimate all the costs involved. The Closing Costs may be in the thousands of dollars if not in the tens of thousands.

Here are some of the main points:

Buying down the mortgage with discount points

You can lower the ongoing costs of the loan over the life of the mortgage by considering this optional fee of 0.5 – 3 points on the mortgage total. This will qualify as a deduction as mortgage interest. It is only a one time charge.  This will qualify as a deduction for mortgage interest. It is only a one time charge.

ORIGINATING THE MORTGAGE COSTS

The appraisal fee, cost of credit reports, and the loan originating fee are the usual fees associated with obtaining a mortgage. Interest that is accrued between the closing date and the end of the month and mortgage & hazard insurance may also be included in the closing costs.

LOCAL Gov’t FEES and Taxes

These will vary depending on the local government requirements. Property taxes may be prorated from the day you own your home. These costs also may include Homeowner’s Association (HOA) dues, assessments, and personal property taxes specific to the area you are purchasing.

COSTS for documentation

Searches for Title History in public records will also be a cost you will incur. You want your Title to be free and unencumbered from any liens & other ownership claims. Transfer fees, recording fees and the cost of Title Insurance are all costs that will ensure that the property will be legally recorded in your name on the deed.

The real reason why Real Estate Agents ask you for a Pre-qualification

Date: Dec/17/2017
By: John Franc
Category: Buyer
Type: Article

First of all,  it is very important and to your benefit to get a mortgage pre-qualification letter. This is not difficult to obtain and will only take about 10 minutes of your time.  A real estate agent will spend hours, days or months showing you homes, the least you as a buyer can do is spend the 10 minutes or so speaking to a lender to obtain a pre-qualification letter. You will find most all of the real estate agents now a days require this before they show you homes for 3 very improtant reasons.  Think of the pre-qual letter as your ticket to see homes that you are interested in seeing.   Also, you will not be obligated to use the lender who provided you with the initial pre-qual letter.  You should continue to shop for the best interest rate and terms.

 

A Realtor will work hard and more effectively for you to help you find your dream home when you are prepared and are a quailified buyer. An agent spends time and money helping a buyer find and purchase their dream home and just wants some proof the buyer is serious about buying a home.   I highly recommend getting a pre-qualification letter from a mortgage lender before house hunting.  This will also  give you and your agent a more realistic view of how much you can afford to invest in a home and decide on a price range to target.   Once you know how much you can afford to invest in a property you can then focus on homes within that range.                                                                                                                                                                                                                                                                                                                                                                Having a mortgage pre qualification letter will show the sellers that you’re serious about buying a home. I can not stress how important it is to keep the seller interested in you as a qualified buyer. A seller has one goal, and that is to sell thier property as quickly as possible. Sellers already know that they should only deal with qualified buyers, their real estate agent will advise them of it.  A seller might ignore you when you need more information on the house or not even consider a offer on the property if your not a qualified buyer.   Most sellers specifically instruct thier agent to not show homes to anyone that does not have a pre qualifacation letter.  If you are a buyer that is paying cash for a property be prepared to show the seller "Proof of Funds".  Proof of Funds show that you have the funds available to purchase the property.                                                                                                                                                                                                                                                                                                                                            The more important reason for asking for pre approval and identification is for the real estate agents own safety. Crimes against agents (Robbery, Murder, Rape) have been on the rise since 2010. Most of these crimes take place while showing a home to a buyer. I am not being over dramatic. Here are just a few occurances. See:

 Real estate agent survived attack man showing home

The concerning rise of real estate agent attacks

Realtor robbed pistol whipped showing home

 

John Franc  Real estate Agent and Accredited Buyers Representative.

If you have any questions I invite you to contact me or call me. I would be happy to answer any question you have big or small.

Understanding The MLS

Date: Dec/17/2017
By: John Franc
Category: Real Estate
Type: Article

Multiple Listing Service. Generally referred to as MLS . Multiple listing services are organized and operated by professional, licensed real estate agents. The first multiple listing service originated more than 100 years ago, and today there are more than 900 different services operating throughout the country. It is a well established and trusted system.

A multiple listing service is a collection of national private databases used by real estate brokers who agree to share their listing agreements with one another to locate ready, willing and able buyers for properties more quickly than they could on their own.

Think of the MLS as a big property warehouse. When property is available for sale, Agents put the property into the warehouse. When it is sold, The Property is moved to the buyers location and only the details of the property remain in a file and only used to provide data for calculations .

Since real estate cannot actually be stored in a warehouse, the MLS only contains information. MLS is an extremely powerful tool to know what is available for sale at a given moment. That is why real estate agents developed the MLS. Quick knowledge of home inventory made agents more productive.

What advantages does a multiple listing service offer to the consumer? As a seller, you can expose your property to thousands of potential buyers you would otherwise never reach. As a buyer, you enjoy the benefit of instant access to listings that match specified criteria, beyond price range and location.

Maybe you want to see homes with a big yard, a garage and a lake view, or homes in a certain school district or close to public transportation. Many multiple listing service sites can also tell you how much you should expect to pay in taxes, mortgages payments, and utilities on a particular property. This service saves everyone involved in real estate transactions time and legwork in sorting through the millions of properties on the market.

 

What is a Multiple Listing Service?

If you've ever bought or sold a home, you've probably heard your agent talk about CMA’s. He or she is referring to comparative market analysis. CMA is an analysis report that compares the home your interested in (if your a buyer) or your home (if your a seller) to very similar properties in a specific area around that home. The CMA will list the price these homes sold for. The CMA is designed to get the “current market value” of the home being bought or sold.

If your a seller, the seller's agent will do such an analysis before suggesting an appropriate asking price for your home.

If you're a buyer, CMA helps the buyers agent determine what properties you should be shown based on your price range.

Agents get this data from the multiple listing service and public records.

 

John Franc Real estate Agent and Accredited Buyers Representative.

If you have any questions I invite you to contact me or call me. I would be happy to answer any question you have big or small.

 

Should I use a real estate agent

Date: Dec/17/2017
By: John Franc
Category: Buyer
Type: Article

Purchasing a new home can be overwhelming. You may have an idea of where you’d like to live and how much you’d like to spend, but when it comes down to actually hunting for your new home, you may not know where to start. If your head starts spinning as soon as it’s time to roll up your sleeves and dive into the house search, you may be thinking about hiring a real estate agent. But is this a good move? Here are some things to consider.

Why you might need an agent

Paperwork: Do you like spending your spare time filling out paperwork and sifting through piles of documents? We didn’t think so. A home purchase involves a ton of paperwork. A real estate agent is familiar with the process involved in filling out all of the necessary documents, so it will be helpful to have someone guide you through each step.

Details: If this is your first time purchasing a home, you may also need assistance with tasks such as choosing an inspector and figuring out who should cover costs for things like home repairs.

Connections: Unless you already have good connections, a seasoned real estate agent can make the process smoother by connecting you with professionals who can further assist you with your home purchase, such as a trusted home inspector or a mortgage broker.

Negotiations: Your real estate agent can act as the middle man (or woman) when it comes to negotiating. Sometimes sellers can be difficult to deal with, so having a third party involved can make communication a little smoother. You’ll also be more likely to snag a discount through your agent.

 

Why you may not need a real estate agent

This isn’t your first rodeo: Hiring a real estate agent may be a wise choice if this is your first home purchase. However, if you’ve been through the process before, and you know exactly what you want, you might be able to move ahead without a real estate agent’s assistance.

You have time on your hands: If you have enough time (and energy) to focus on the home purchase process, this is another reason why you may be able to skip the extra help.

You’re familiar with the paperwork: One way a real estate agent can help is by assisting you with paperwork. If you’re fairly familiar with how to properly complete the necessary documents, and you understand when and how the documents should be filed, you’ve won half the battle.

Finding the best agent

 

Make sure the real estate agent is licensed by the state. Your best bet may be to hire someone who is a member of the National Association of Realtors. This is because the association requires its members to adhere to a set of ethics guidelines that are put in place to make sure your best interests are protected and that you get the best service possible. In addition, make sure he or she is familiar with the area where you desire to reside. Also reach out to friends and family for suggestions. The experts recommend speaking with at least three agents before making a final decision.

IS USDA A PRIME CUT OF STEAK OR A GREAT WAY TO MORTGAGE YOUR NEXT HOME?

Date: Dec/17/2017
By: John Franc
Category: Real Estate
Type: Article

Is USDA a prime cut of steak or a great way to mortgage a home?

When you hear the phrase USDA prime does a nice rare grilled porterhouse steak come into mind? Well it does for most folks but USDA is also a US Department of Agriculture mortgage program. This program does not target farmers or ranchers and you don’t even have to know how to plant an ear of corn. To be eligible for this program you simply have to qualify based on your income & location.

If you feel more comfortable living in a home that is surrounded by fields & pastures rather than pavement purchasing a home may be easier than you think. Most buyers haven’t even heard of this least known mortgage assistance program called USDA.

You will be surprised to know how easy it is to obtain a USDA loan which offers no down payments and low interest rates if you qualify. This is available for both suburban and rural home buyers. Issued by the USDA Rural Development Guaranteed Housing Loan Program by the United States Department of Agriculture it’s also known as the USDA loan Program. In 2014 USDA helped almost 140,000 families buy or improve their homes by investing about 20 billion dollars.

There are 3 USDA home loan programs. Home Improvement loans that allow home owners to do repairs or upgrade their homes. You can even combine a loan & a grant with upwards of $27,500 in assistance. The USDA provides loan guarantees mortgages to participating local lenders much like VA backed and FHA loans. This allows you to get low mortgage interest rates even without putting any money up for a down payment. Remember that if you put down less than 20% you will be required to purchase mortgage insurance. The last type of USDA loan is a direct loan that are issued for very low income home buyers. These direct loans can have mortgage interest rates as low as 1% with subsidies.

 

To qualify for a USDA backed mortgage, your income limits & household size will vary with the location of your home purchase. Non-occupied residences do not qualify for USDA homes. It must be your primary residence to qualify.

Other eligibility requirements are:

being a permanent resident or US citizenReliable income usually for 2 yearsAcceptable credit history that had no accounts converted to collections in the past twelve months. You may still qualify if you were affected by circumstances that were out of your control including a medical emergency. Your monthly payment which includes taxes, principal, interest and insurance is 29% or less of your monthly income. Also your other total monthly debt payments can’t exceed 41% of your total income. Credit scores higher than 660 will be considered for higher debt ratios by the USDA.

If you have a credit score of 620 and higher you may qualify for streamlined processing while scores below 580 must meet more stringent underwriting requirements. You may even qualify without a credit score by using nontraditional credit references such as your rental payment and utility payment histories.

The USDA issues mortgages to individuals that are deemed to have the greatest need. These applicants should be unable to secure a mortgage from traditional sources, are without safe, decent, sanitary housing or have an adjusted income that is at or below the low-income limit for the area they reside.

Homes must be 1800 square feet or less to qualify and have a home value below the area loan limit. Generally, metropolitan areas are excluded from the USDA programs but there are some areas of opportunity that exist in many suburbs.

Here’s some good news for Ocean & Monmouth County Income Limits:

*New limit for 1-4 Family members has been raised from $95,000 to $99,500

*New limit for 5-8 Family Members has been raised from $126,000 to $131,350

Once again these are the highlights of USDA Mortgages

not restricted to 1st time home buyersflexible credit requirementsno down payment requiredno limit on seller contributionvery low monthly guarantee fee (.35% compared to FHA .85% MIP)Loan amount can go up to appraised value to cover closing costs if home appraises above purchase priceNo restrictions on swimming pools or flood zones
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The data relating to real estate on this web site comes in part from the Internet Data Exchange program of the MLS of the Ocean County, NJ Association of REALTORS®. IDX information is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

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www.johnfranc.com Copyright 2012 - 2016 All rights reserved.